Pakistan’s merchandise exports to North America reached a record $6.415 billion in FY25, driven almost entirely by textile and clothing shipments to the United States. Overall exports to North America grew 9.97% to $6.415 billion in FY25 from $5.833 billion in the preceding year, largely driven by textile and clothing shipments to the US market.
During the first seven months of FY2025-26, the merchandise exports to North America rose by 3.07%, reaching $3.916 billion. This is up from $3.799 billion during the same period last year.
But the year that followed has been defined by tariff chaos. Since April 2025, the US tariff on Pakistani goods has shifted from 29% to 10% to 19% and back to 10% — reshaped by Trump’s trade war, a bilateral deal, and a Supreme Court ruling. For an export corridor worth over $6 billion, this volatility has tested both resilience and adaptability.
How Much Does Pakistan Export to North America?
Exports to the United States, which account for nearly 94% of Pakistan’s shipments to North America, rose 3.47% to $3.69 billion in 7MFY26 from $3.566 billion a year earlier. Canada accounts for most of the remainder, with Latin American and South American markets representing a small but growing share.
In FY25, the breakdown was:
- United States: $6.028 billion (up 10.72%)
- Canada: $386 million (down 0.80%)
- Latin America: $73.5 million (down 7.52%)
- South America: Growing segment — $238.52 million in 7MFY26 alone
The US is not just Pakistan’s largest market in North America — it is the largest single-country destination for Pakistani goods worldwide, accounting for approximately 17% of total exports.
Exports to the United States
FY25 Record and FY26 Trends
In FY25, exports to the US increased 10.72% to $6.028 billion from $5.444 billion in FY24. This growth came despite global trade uncertainties, signaling strong demand for Pakistani textiles and apparel in the American market.
In the current fiscal year, growth has moderated. Total exports to the US during July-February 2025-26 were recorded at $4.156 billion against the exports of $4.011 billion during July-February 2024-25, showing an increase of 3.61 percent.
U.S. goods imports from Pakistan totaled $5.4 billion in 2025, up 5.9 percent ($303.3 million) from 2024. Meanwhile, U.S. goods exports to Pakistan in 2025 were $3.3 billion, up 56.6 percent ($1.2 billion) from 2024 — reflecting Pakistan’s commitment to narrow the trade imbalance. Under a new arrangement, Pakistan plans to import an additional $2.5 billion worth of goods from the US during the current fiscal year to help address the trade imbalance.
What Pakistan Exports to the US
Textiles and apparel dominate the export basket, accounting for roughly 80-92% of total shipments. According to data available with Wealth Pakistan, textiles and apparel exports rose from $2,377 million in FY25 (Jul–Dec) to $2,470 million in FY26 (Jul–Dec), reflecting a growth of about 4 percent.
Key sectors contributing to December’s export figures included knitwear (Rs 104.27 billion), readymade garments (Rs 100.18 billion), bed wear (Rs 62.08 billion), rice (Rs 37.30 billion), cotton cloth (Rs 31.15 billion), towels (Rs 21.83 billion), and made-up articles excluding towels and bedwear (Rs 15.82 billion).
Beyond textiles, Pakistan exports surgical instruments, sports goods, leather products, rice, and a growing volume of IT services to the US. At the current trends in exports, it is forecast that in 2026 Pakistan’s apparel exports to the US will be worth $4.50 billion USD.
The US Tariff Saga and Trade Deal
The past year has reshaped the entire tariff framework governing Pakistan-US trade:
- April 2, 2025: Trump imposed a 29% reciprocal tariff on Pakistan under “Liberation Day,” claiming Pakistan charges 58% on US goods.
- April 9, 2025: After global market turmoil, Trump paused country-specific tariffs above 10% for 90 days.
- July 5, 2025: Pakistan and the US reached a tariff framework agreement ahead of the deadline.
- August 1, 2025: Following a bilateral trade deal finalized in Washington on July 30-31, Pakistan’s tariff was formally reduced to 19%.
- February 20, 2026: The US Supreme Court struck down IEEPA tariffs as unconstitutional, invalidating the legal basis for all reciprocal tariffs.
- February 24, 2026: Trump imposed a replacement 10% global tariff under Section 122 of the Trade Act of 1974, effective for 150 days until July 24, 2026.
The trade deal went beyond tariffs. It included a US commitment to co-develop Pakistan’s oil reserves, cooperation on critical minerals, and energy partnership elements. Pakistan received its first shipment of US crude oil in October 2025.
Under the 19% tariff, Pakistan held a competitive edge: The most immediate impact of the trade deal lies in the textile sector, which accounts for over 90% of Pakistan’s exports to the U.S. By lowering tariffs to 19%, the U.S. has positioned Pakistan as a more competitive alternative to India (25% tariff) and Bangladesh (20% tariff). With Section 122 now applying a flat 10% to all countries, that differential advantage has temporarily disappeared.
Exports to Canada
Canada remains Pakistan’s second-largest North American market, though exports are declining. Exports to Canada recorded a paltry rise of 2.94pc to $135.60m in 4MFY26 from $131.73m over the corresponding months of last year. In FY25, exports to Canada stood at $386.106m, down from $389.220m in the previous year, a 0.80pc decline.
In contrast, exports to Canada declined 2.64% to $226.28 million in 7MFY26 from $232.42 million a year earlier.1 Pakistan primarily exports textiles, rice, and leather goods to Canada. The decline reflects both Canadian economic slowdown and limited trade diversification efforts by Pakistan.
Exports to Latin and South America
The broader Americas present a mixed picture. Exports to Latin America fell 18.87% to $37.14 million in 7MFY26 from $45.78 million a year earlier.
In Central America, Pakistan’s main export destination is Mexico, which stagnated at $46.44m in 4MFY26 from $46.27m over the corresponding months of last year.
However, South America has emerged as a bright spot. Meanwhile, exports to South America, including Argentina, Brazil and Uruguay, rose 18.46% to $238.52 million in 7MFY26 from $201.34 million in the same period last year. This growth, while from a small base, suggests potential for market diversification.
The Export Diversification Challenge
Pakistan’s overwhelming dependence on textiles for its North American exports remains both a strength and a vulnerability. Despite the revised tariff providing greater clarity for exporters, post-announcement data suggest Pakistan’s export performance remains closely tied to textiles and apparel, with limited diversification into other sectors.
According to experts, Pakistan’s textile exports declined to USD 1.33 billion in February 2026, down 6.34 percent compared to USD 1.42 billion in February 2025. Rising operational costs and regional tensions are cited as key contributors, with higher freight and shipping expenses further limiting competitiveness.
Meanwhile, exports during the first eight months of FY26 stood at 20.46 billion dollars, down 7.3 percent from 22.07 billion dollars in the corresponding period of FY25. The overall export decline, even as US-bound shipments grew modestly, underscores the need to develop non-textile export categories for North America.
Exporters warned that renewed protectionist trade measures in the United States are reshaping global textile flows, prompting Chinese producers to divert shipments to European markets. This has intensified competition in the European Union, one of Pakistan’s key export destinations under the GSP Plus scheme, with buyers increasingly opting for lower-priced Chinese products.